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Reason why Microsoft’s Activision deal will be approved by EU regulators

Reason why Microsoft’s Activision deal will be approved by EU regulators

by | Mar 2, 2023 | Microsoft

Microsoft announced in January 2023 that it would acquire Activision Blizzard, one of the world’s largest video game publishers, for $68.7 billion. The deal would make Microsoft the owner of popular franchises such as Call of Duty, Warcraft, Overwatch, and Candy Crush. However, such a massive deal also raised concerns about its impact on competition and consumer choice in the gaming industry.

The deal is subject to regulatory approval from various authorities around the world, including the European Union (EU). The EU has been known to be strict when it comes to antitrust issues, especially in the tech sector. For example, it fined Google billions of euros for abusing its dominance in online advertising and search engines. It also blocked mergers between Siemens and Alstom in 2019 and between UPS and TNT Express in 2013.

However, according to a recent report by Reuters, Microsoft’s Activision deal is likely to be approved by EU regulators without any major concessions or remedies. The report cites sources familiar with the matter who say that Microsoft has already taken steps to address potential competition concerns by striking licensing deals with Nintendo and Nvidia.

The licensing deals allow Nintendo and Nvidia to use some of Microsoft’s gaming technology and content on their platforms. For example, Nintendo can offer Xbox Game Pass subscriptions on its Switch console, while Nvidia can stream Xbox games on its GeForce Now service. These deals show that Microsoft is willing to share its gaming assets with other players in the market and not lock them behind its own ecosystem.

The report also suggests that EU regulators are not convinced that Activision’s games are essential for Microsoft’s rivals to compete effectively. Activision’s games are mostly played on consoles or PCs, while other gaming platforms such as mobile devices or cloud services have different audiences and offerings. Moreover, Activision faces competition from other game publishers such as Electronic Arts (EA), Ubisoft, Take-Two Interactive, Sony Interactive Entertainment (SIE), and Tencent.

Therefore, EU regulators are likely to conclude that Microsoft’s Activision deal does not pose a significant threat to competition or consumer choice in the gaming industry. The deal is expected to be cleared by April 25, which is the deadline set by the European Commission after extending it by 10 working days. However, there are still some hurdles before the deal can be finalized, such as obtaining approval from other jurisdictions such as China or facing possible legal challenges from competitors or consumer groups.

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Microsoft is set to acquire Activision Blizzard at $68.7 billion and become the world’s third-largest gaming company

Microsoft is set to acquire Activision Blizzard at $68.7 billion and become the world’s third-largest gaming company

by | Jan 18, 2022 | General, Microsoft, Xbox

Microsoft is set to become the world’s third-largest gaming company by revenue with the acquisition of Activision Blizzard. The company has agreed to acquire Activision Blizzard Inc. in a transaction valued at $68.7 billion. Microsoft will launch Activision’s games into the Xbox Game Pass portfolio bringing users games such as Warcraft, Diablo, Overwatch, Call of Duty and Candy Crush. Satya Nadella, Microsoft CEO believes this acquisition will provide a building block for the Microsoft metaverse.

Activision Blizzard Microsoft

This will become the biggest acquisition since Satya Nadella took over as the Microsoft CEO. Surpassing the $26 Billion Microsoft paid to acquire LinkedIn in 2016. Last year Microsoft acquired ZeniMax Media (Bethesda Softworks) for $7.5 billion in a move to build an industry-leading first-party Xbox games studios. The new acquisition will increase Microsoft’s internal game development studios to thirty. It will also bring with it Activision’s global eSports activities through Major League Gaming.

“Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms,” says Satya Nadella, chairman and CEO, Microsoft. “We’re investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all.”

Microsoft says Activision Blizzard will continue to operate independently until the deal closes in the fiscal year 2023. Then once the deal is complete Activision business will report to Microsoft Gaming CEO, Phil Spencer. Phil notes “we will offer as many Activision Blizzard games as we can within Xbox Game Pass and PC Game Pass, both new titles and games from Activision Blizzard’s incredible catalog“.

“Together we will build a future where people can play the games they want, virtually anywhere they want.”

Phil Spencer, CEO, Microsoft Gaming

Microsoft is also announcing a new Xbox Game Pass milestone with over 25 million subscribers today. The company will be looking to increase this with the introduction of new and exclusive games and titles.

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